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61 CHAPTER 4 Administrative Cost Estimates for Motor Fuel Taxes and Alternative Revenue-Generation Systems This chapter presents a cost analysis for five transportation 4.1 Cost Accounting Framework revenue-generating systems, including motor fuel taxes, tolling, VMT fees, cordon/congestion pricing, and parking pricing. This section describes the cost accounting framework that Motor fuel taxes, which have been levied in the United States was used to estimate the costs required to administer each since the 1920s, are one of the main revenue and funding transportation revenue system presented in this chapter. The sources of the federal HTF for constructing and maintaining the general methodology for analyzing administrative, collection, nation's highways and other transportation facilities. Although and enforcement costs involved the following: tolling has a long history, it has been viewed, especially in recent When feasible, financial data were collected from 2003 to years, as a supplemental revenue source to motor fuel taxes. A number of new tolling facilities have been proposed and have 2007; been under construction around the country. To normalize the data between tax systems, it was neces- In an effort to search for alternative revenue sources that sary to differentiate between and separately analyze capital can mitigate further declines in the HTF, interest in VMT fees and operational costs; has been rising. Although some VMT fee systems have been Annual operational expenditures were examined and tested and proposed, there is not a single VMT fee system in sorted between administrative, collection, and enforce- use that levies fees for all vehicle types. Consequently, there is ment activities; no real cost data available except information that has been Revenues generated from ancillary activities, such as food submitted by companies that competed for building and oper- and fuel concessions along toll road facilities, were excluded ating the proposed VMT fee system in the Netherlands. from this analysis; and This chapter provides an overview of a cost accounting Enforcement activities could be conducted by a private or framework established for this report and then presents the public agency. cost data collected for each of the five systems. For motor fuel taxes, more detailed cost analysis is focused on eight selected Administrative costs included in this analysis involved the states, which were chosen based on a set of criteria (e.g., geo- following: graphic diversity, point of taxation). As part of this analysis, capital and/or operational cost data for 14 tolling agencies Wages and salaries, employee benefits, social security taxes, have been collected. These agencies include older turnpike and pensions of administrative and collection staff; systems, more recently established toll agencies, and private Finance and accounting activities, especially if involved in companies that operate a toll facility under a concession the processing of (i) customer transactions and tax forms; agreement. For VMT fees, the costs examined in this report (ii) the settlement of interagency transactions; (iii) the pro- are based on the data from the proposed system in the cessing of bulk transactions from rental car companies, local Netherlands. Due to data limitations, only 1 year of cost data delivery trucks, and auto dealers; (iv) the exclusion of trans- for the VMT fees has been gathered, while 3 to 5 years of cost actions by non-revenue vehicles (e.g., police, ambulance, data for motor fuel taxes and tolling have been collected. For and fire vehicles); and (v) processing of refund requests; cordon pricing, cost data were collected for five existing cor- Management and professional services; don pricing systems. For parking pricing, three systems were Procurement and purchasing of equipment; examined. Office supplies and equipment;